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Military Housing Allowances (BAH and OHA)

When you join the military, your military benefits include the VA home loan program which allows you to apply for a no-money-down home loan with a competitive interest rate and a guarantee to the lender from the federal government. But not everyone wants to purchase a home. Some choose to rent, others are required to rent because of the nature of their military assignment.

The Department of Defense offers servicemembers a housing allowance that is meant to offset the cost of renting a home or to offset the cost of a monthly mortgage payment. The military housing allowance is not intended to fully cover all costs of renting or owning a home but the offset is significant. What do you need to know about military housing allowances? We’ll explore the most important details below.

Two Types of Housing Allowance

The two basic types of military housing allowance are:

  • Basic Allowance for Housing (BAH)
  • Overseas Housing Allowance (OHA)

BAH is paid to those with military duty in the United States. OHA is paid to those who are assigned overseas and who do not live in government housing.

BAH and OHA are not taxable like basic pay is. But you are permitted to use BAH to qualify for a home loan, and you can use BAH to pay your monthly mortgage.

BAH rates are set each year based on current economic factors, housing market data, and other variables. Rates are subject to change, but in general, you should not see your housing allowance decrease from one year to the next. We’ll examine why that is below.

Overseas Housing Allowances (OHA) are paid to military members assigned overseas who won’t be living in on-base or government housing. The allowance is meant to offset the cost of living off base, but like BAH, it is not necessarily meant to cover the entire cost of rent and utilities. But it does cover a significant portion of them depending on location and other variables.

The DoD says OHA is paid to approximately 55,000 troops overseas to the tune of $2 billion per year.

Housing Allowance Rate Protection

The DoD reminds servicemembers that “Individual rate protection” will typically keep a servicemember from getting a lower stateside housing allowance than the previous year assuming certain conditions are not present. What conditions?

The DoD requires the service member to maintain eligibility for BAH. Rate protection is meant to ensure that those in the military “who have made long-term commitments in the form of a lease or contract are not

Penalized” in cases where housing costs in a given market actually go down.

Rate protection for service members may be assumed UNLESS one of the following applies:

  • Permanent Change of Station (PCS)
  • Reduction in pay grade
  • Change in dependency status

Who Is Eligible For A Military Housing Allowance

Uniformed service members who are not assigned quarters on base may be approved to draw BAH or OHA. Some who live on base in stateside public/private partnerships may pay rent to a property management company while living on base.

This is because the properties are owned and/or maintained by that private agency. In other cases, you may rent or purchase property off-post and use your housing allowance for that use instead. Overseas, you will draw OHA when living off-base in the local economy.

How Military Housing Allowances Are Calculated

Your BAH is calculated based on your duty location (the local zip code for stateside bases or the specific location in the host nation where you serve), your rank, whether you are married or not, and the calendar year you are approved for the allowance in. OHA is calculated using a more complex formula that includes cost and currency data, location and size of the country, and your status as a single or married service member.

OHA rates are compiled by country and are updated based on new cost data and currency fluctuations.  Where To Find Your BAH Rates For The Current Year

  • Calculate your stateside BAH rate using the BAH Calculator at the DoD Travel Management Office official site.
  • Calculate your Overseas Housing Allowance rate using the OHA Calculator at the DoD Travel Management Office.

Applying For A Military Housing Allowance

When assigned overseas, you will apply with your base housing office and be sure to fill out  DD Form 2367, Individual Overseas Housing Allowance (OHA) Report. Most bases have a rule that you should check in with the housing office prior to committing to any lease or other legally binding agreement–you will want to know what the locals know about renting off post.

When you are assigned stateside, report to the base housing office as soon as you can to learn what local requirements may apply for you to begin drawing BAH. In many cases, you may be given information in your welcome briefing or in-processing appointments, but it’s best to check in with the housing office as early as possible. Procedures for getting BAH may vary from base to base, and may not be standardized across all branches of service.

What To Know About BAH and OHA

Your military housing allowance for stateside and overseas duty is calculated on rental data, NOT homeownership data. This housing allowance does not take into account any costs associated with owning a home and the amount of your BAH or OHA should not inform your decisions where purchasing a home is concerned.

The BAH you get is not meant to be a realistic yardstick for the costs of home ownership–if you try to decide how much mortgage you can afford each month, BAH doesn’t serve as an indicator of how much loan you may be approved for. It may be best to think of BAH as supplemental income that can help offset a major portion of your home expenses but NOT all of them. You may find that your out-of-pocket costs may run between 5% and 20% of the full mortgage or rental per month.

BAH and OHA may increase as your rank increases, which is helpful if you need to consider buying or renting a larger home sometime in the future.